Bitcoin rose about 22% over the past week, wiping out roughly $2.7 billion in short positions in a single day and reopening the debate over whether the move marks a true bottom or another bear-market trap.
Jake Pahor, writing in his latest note, said a review of 46 comparable moves since 2013 points to a far less decisive answer than the market’s loudest voices suggest. In his data set, similar weekly surges have often appeared deep in bear markets, but the historical split between lasting reversals and failed breakouts is effectively even. In his view, the real test now is whether the CSH score can stay above 30 in the weeks ahead. It stood at 31.9, up from 24.0 a week earlier.
$2.7 billion in short liquidations drove the week’s move
According to Coinglass, about $2.7 billion in short positions were forcibly liquidated during the rally. Bloomberg described it as the largest short liquidation event on record.
Bitcoin reached an intraday high of $79,461 during the week and later stabilized near $76,500 on Bitstamp late Sunday. The article also cited another wave of liquidations: roughly $2.7 billion in crypto shorts were wiped out in the 24 hours through Aug. 19, and another roughly $1 billion was erased on Aug. 21 when Bitcoin broke above $75,000, according to CoinDesk.
Pahor argued that the move was driven largely by a squeeze rather than fresh spot demand. The article said the trigger came after the U.S. Treasury stated that it would at least double the size of its long-end buyback operations from $2 billion to at least $4 billion per operation.
A 13-year backtest found 46 similar events
Pahor said he reviewed the full daily history of Bitcoin prices and CSH scores going back to 2013, filtering for every week in which Bitcoin gained 18% or more. Because large moves often cluster, consecutive qualifying days were treated as a single event.
That produced 46 events over 13 years, or about three to four per year. He said those spikes almost never appear in the middle of a cycle. They tend to show up only near extremes, either close to bull-market tops or deep in bear markets.
Of the 46 cases, 30 happened when Bitcoin was still more than 30% below its all-time high, which is the bucket he sees as most comparable to current conditions. The outcomes in those 30 cases split cleanly in half:
- 15 times, Bitcoin never revisited the pre-rally low and continued higher.
- 15 times, the entire advance was erased within six months, with some cases going on to make new lows.
That is the core of his argument. A weekly surge of this size, by itself, does not separate a real bottom from a trap.
The key signal is whether CSH can hold above 30
Pahor then narrowed the sample further, looking for historical episodes that resembled the current setup more closely: an extended stretch of depressed CSH readings followed by a violent weekly rally that pushed the score above 30.
He found only four such cases. All four eventually aligned with the end of their respective bear markets. In those instances, the worst 30-day drawdown afterward was 11%, and 12-month returns ranged from +84% to +737%.
Still, he said one apparent lookalike from July 2022 shows why the threshold matters. Bitcoin jumped 21% in a week while still sitting 65% below its high, and the CSH score moved into the low 20s. The move looked similar at first glance, but the score stalled at 28 and never cleared 30. Four months later, Bitcoin finally bottomed at $15,742.
He also pointed to late 2014, when two separate 20%+ weekly rallies occurred while the CSH score was still in single digits. Both advances were fully retraced, and that bear market continued for another year.
His conclusion is straightforward: the useful signal is not the green weekly candle. It is whether the CSH score can hold 30 and keep rising in the following weeks. At 31.9, that is now the number he is watching most closely over the next month.
The low-score accumulation phase lasted 79 days
The note said the CSH score stayed at 30 or below from June 4 through Aug. 21, then broke out of that range on Saturday. That ended a 79-day stretch of low-score execution under his framework.
Even after the jump, he said Bitcoin remains in the historical bottom 25% zone and is still about 39% below the October peak of $124,774. The current score band maps to a price range of $69,632 to $86,377. The top of the 20-score zone sits at $69,632, about 9% below Sunday’s price.
The article also highlighted the weekly bull market support and resistance band formed by the 20-week and 21-week moving averages, currently around $69,400 to $69,600 based on Bitstamp weekly data. Bitcoin’s weekly close came about $7,000 above that band. Pahor noted that in April and May, price also closed above the band before turning lower again, which is why his rules focus on repeated closes rather than a single move above it. He also noted that the band sits close to the top of the CSH 20 zone.
What the July 2022 example changed
The July 2022 case stands out because it looked so similar at first. Bitcoin rose 21% in a week, sentiment improved quickly, and the market had already fallen sharply from prior highs. But the structure did not hold. The CSH score failed to move through 30, topping out at 28 instead, and the actual low came months later.
For Pahor, that is the lesson. The distinction between a real trend change and a failed breakout appears only after the rally, not during it. What matters is continuation.
He added that even in the four historical cases that did turn out to be genuine inflection points, Bitcoin still spent roughly a month moving sideways or lower before the broader uptrend took hold. In other words, history does not support the idea that traders must act immediately in the same week or miss the move altogether.
The rule set: buy below 30, stay still above 30
Pahor ended the piece with process rather than prediction. He said his base case for months had been that this bear market still had room to fall, and last week’s rally directly challenged that view. If Bitcoin keeps closing above the long-term trend line and the CSH score stays above 30, he said he would publicly withdraw that call in his newsletter.
Even so, his buying plan does not depend on getting that directional view right. While the score spent time in the 20 zone, the plan kept buying every week. At 31.9, buying stops, because the rule is written in advance: buy below 30, do nothing above 30.
- If the score falls back into the 20 zone, buying resumes.
- If it drops below 20, reserved cash is deployed.
- If the market never revisits the 20 zone, positioning has already been built.
That framework, he said, is designed to keep a mistaken macro view from turning into an expensive portfolio error.
What the market needs to see next
The article reduces the next stage to two checkpoints. First, the CSH score needs to hold above 30 and keep rising over the coming weeks. Second, Bitcoin needs to show continuity around key weekly levels rather than one-off strength.
Pahor also noted that September has historically been a weak month for Bitcoin. If that seasonal pattern shows up again this year, the start of the CSH 20 zone at $69,632 may be where assets become historically cheap again.
His broader takeaway is not that the latest rally confirms a new bull market, nor that it proves a trap. The 13-year sample says the weekly surge alone cannot do either. What comes next will decide which side of the 50/50 split this episode ultimately joins.